WASHINGTON, D.C. National Air Cargo Group, Inc. d/b/a

WASHINGTON, D.C. National Air Cargo Group, Inc. d/b/a

BEFORE THE
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY
WASHINGTON, D.C.
Application of
National Air Cargo Group, Inc. d/b/a
National Airlines
for an amended certificate of public convenience
and necessity pursuant to 49 U.S.C. § 41102
(interstate and foreign charter air transportation of
persons, property and mail)
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) Docket OST-201 0)
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APPLICATION OF
NATIONAL AIR CARGO GROUP, INC. d/b/a NATIONAL AIRLINES
Communications with respect to this document should be addressed to:
Mark W. Atwood
Elizabeth J. Wadsworth
Sher & Blackwell LLP
1850 M St., NW, Suite 900
Washington, D.C. 20036
(202) 463-2513
Attorneys for National Airlines
July 9,2010
NOTE: Any person may respond to this application by filing an answer in the
above-referenced docket and serving a copy on the persons named in the
attached service list. Answers are due not later than July 29, 2010.
BEFORE THE
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY
WASHINGTON, D.C.
Application of
National Air Cargo Group, Inc. d/b/a
National Airlines
for an amended certificate of public convenience
and necessity pursuant to 49 U.S.C. § 41102
(interstate and foreign charter air transportation of
persons, property and mail)
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)
)
)
) Docket OST-201 0)
)
)
)
)
)
APPLICATION OF
NATIONAL AIR CARGO GROUP, INC. d/b/a NATIONAL AIRLINES
National Air Cargo Group, Inc. d/b/a National Airlines ("National Airlines"
or "the company"), an air carrier operating under 14 CFR Part 121, hereby
applies, pursuant to 49 U.S.C. Section 41102, Subpart B of the Department of
Transportation's Procedural Regulations (14 CFR Part 302, Subpart B) and
Section 204.3 of the Department's Economic Regulations (14 CFR § 204.3), for
an amended Certificate of Public Convenience and Necessity authorizing it to
conduct interstate and foreign charter air transportation of persons, property and
mail with large aircraft as described in this Application.
Background
National Airlines is a certificated air carrier that operates aircraft on a
charter basis, and currently holds certificate authority to engage in the interstate
and foreign charter air transportation of property and mail. 1 Based in Ypsilanti,
Michigan, it currently operates three DC-8 aircraft.2
National Airlines has been very successful in its current scope of
operations and wishes to expand its business to include a Boeing 757 -200ER for
passenger charter operations. National Airlines intends to operate the aircraft for
charter brokers, public charter operators, private corporations and sports team
Since the aircraft will allow for the
conducting various types of charters.
transportation of passengers as well as cargo, National Airlines seeks to amend
its DOT certificate to authorize transport of passengers, property and mail in
interstate and foreign commerce.
National Airlines'
profitable existing
cargo
operation
will
primarily
underwrite the aircraft lease and essentially all of the start-up and operating costs
of the service. To the extent any additional infusion of capital is required, this will
be provided by National Airlines' ultimate parent company, National Air Cargo
Holdings, Inc., and its largest subsidiary, National Air Cargo, Inc., as attested to
in the funds verification and provision letters respectively provided at Exhibits
NA-12 and NA-13.
Thus, National Airlines will have virtually no financial
exposure in its amended certificated operations.
National Airlines' addition of the Boeing 757 -200ER to its fleet and the
amendment of its certificate to include both passenger and cargo transport is the
1
See DOT Order 2006-12-20 (dated December 21, 2006).
2 National Airlines also previously operated two BAE Jetstream 31 and 32EP corporate
aircraft for passenger air taxi purposes under a Part 298 exemption from the Department
and FAA Part 135 operating authority. The company suspended those operations in
2009.
2
first step in the company's plan to substantially expand its aircraft fleet and
operations over the next two years.
In addition to the Boeing 757-200ER
passenger aircraft, the company is currently in the process of acquiring four
Boeing 757-200s that will be modified into "combi" aircraft for the transport of
U.S. military personnel and cargo under future Civil Air Reserve Fleet ("CRAF")
military contracts. 3
Should National Airlines be granted the amended certificate,
the company intends to submit a fleet expansion request to the Department in
the next year as those plans mature.
National Airlines is part of the National Air Cargo family of companies and
has several corporate affiliates worldwide.
The ultimate sole shareholder of
National Airlines, Mr. Christopher J. Alf, holds a substantial interest in these
affiliates as outlined in this application. National Airlines is a citizen of the United
States within the meaning of the Statute, and is fit, willing and able to operate the
proposed air transportation services in a safe and compliant manner.
The
company's key management personnel are highly experienced in aviation
management and operations. National Airlines has operated as a charter cargo
carrier and also conducted passenger air taxi operations for nearly twenty-five
years, both in its current corporate form and as its predecessor Murray Air, Inc.
("Murray Air"), with no safety incidents, which testifies to its ability to operate
safely and successfully.
3 Like its corporate predecessor Murray Air, Inc., National Airlines is a CRAF member.
The company currently conducts and has for several years conducted cargo transport
for the U.S. military worldwide.
3
Information Required by 14 CFR § 204.3
1. Name and address: (§ 204.3(a))
835 Willow Run Airport
Ypsilanti, MI 48198
Tel. (734) 484-4800
2. Form and State of Organization: (§ 204.3(b)-(d))
National Airlines is incorporated as a domestic profit corporation in the
State of Michigan. It was originally incorporated on April 6, 1992, as Murray Air,
Inc., which was subsequently purchased in November 2006 by National Air
Cargo, Inc.
In December 2006, the name of Murray Air, Inc. was formally
changed to National Air Cargo Group, Inc. ("National Air Cargo Group"), which is
in turn authorized by the State of Michigan and the U.S. Department of
Transportation to conduct business as National Airlines and Murray Air.
A
Certificate of Good Standing from the State of Michigan evidencing National Air
Cargo Group's current valid corporate status is attached as Exhibit NA-1.
3. Citizenship and SUbstantial Interest: (§ 204.3(e) and (9))
Substantial Interest
As shown in the organizational chart attached as Exhibit NA-2, National
Airlines is a wholly owned subsidiary of National Air Cargo Acquisitions, LLC
("NAC Acquisitions"), a Delaware limited liability company. NAC Acquisitions is
in turn wholly owned by National Air Cargo Holdings, Inc. ("NAC Holdings"), a
New York domestic profit corporation. Mr. Christopher J. Alf, the Chairman of the
Board of Directors of NAC Holdings and its numerous subsidiaries, is the sole
shareholder of NAC Holdings.
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Mr. Alf is thus the ultimate holder of all 60,000 shares of National Airlines'
common stock, which is comprised of 6,000 shares of voting and 54,000 shares
of non-voting stock.
Mr. Alf is a citizen of the United States and resides in
California. As the ultimate holder of National Airlines' voting stock, Mr. Alf is the
only person holding a substantial interest in the company as defined in 14 CFR
Section 204.2(m).
As the sole shareholder of NAC Holdings, Mr. Alf, in addition to National
Airlines, is also the sole or primary shareholder of NAC Holding's numerous other
worldwide subsidiaries. 4
These subsidiaries are primarily freight forwarders,
although a few are air carriers. As the Chairman of the Board of Directors that
oversees NAC Holdings and its subsidiaries, Mr. Alf serves in a director role for
these companies.
NAC Holdings was founded in 1991 by Mr. Alf and is based in Orchard
Park, New York.
NAC Holdings is the parent of seven wholly owned
subsidiaries:
a) National Air Cargo, Inc. ("NAC Inc."), a New York corporation;
b) National
Air
Cargo
(Luxembourg)
S.a.r.1.
("NAC
Lux"),
a
Luxembourg corporation, which is the ultimate parent company of
National Air Cargo Middle East FZE ("NAC Dubai"), a United Arab
Emirates corporation, and National Air Cargo (Madeira)-SGPS,
Unipessoal Lda. ("NAC Madeira"), a single-owner Portuguese
limited liability holding company;
Mr. Alf is a partial rather than the sole owner of National Air Cargo (Deutschland),
GmbH, a German corporation.
4
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c) NAC Acquisitions, which as already mentioned is the parent
company of National Airlines;
d) NACM OHQ, Sdn Bhd ("NAC Malaysia OHQ"), a Malaysian private
limited liability company;
e) NACM Holdings, Sdn Bhd ("NAC Malaysia Ops"), also a Malaysian
private limited liability company;
f)
National Air Cargo (Thailand) Limited ("NAC Thailand"), a Thailand
private limited company; and
g) NAC AC Ventures LLC, a Delaware limited liability company.
NAC Inc. is a freight forwarder and a major supplier of transportation
logistics to the U.S. Department of Defense. It provides airfreight broker services
to the U.S. military, and to customers located in the United States and abroad, to
domestic and international destinations. NAC Dubai is located in Dubai, United
Arab Emirates and provides airfreight and aircraft charter services to military and
commercial customers throughout the Middle East. National Airlines, as further
described in the narrative attached to this application as Exhibit NA-3, is a CRAF
carrier operating large U.S. military and commercial aircraft cargo charters
worldwide from its base in Ypsilanti, Michigan.
NAC Malaysia OHQ, located in Kuala Lumpur, Malaysia, provides air
cargo and charter services worldwide. NAC AC Ventures is a holding company
for two entities, NAC 300 LLC, a Delaware limited liability company, which owns
a Bombardier Challenger 300 aircraft available for charters and corporate use,
and NAC 2000 LX LLC, which holds a position on an aircraft to be constructed in
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the future.
National Air Cargo (Deutschland), GmbH ("NAC Germany"), an
affiliate through common ownership, is located in Frankfurt, Germany. It brokers
general cargo and charter services for customers worldwide. NAC Germany is
85% owned by Mr. Alf and 15% owned by NAC Lux.
In 2008, three additional companies were established. National Air Cargo
FZE, a United Arab Emirates ("UAE") free zone company, was established in the
UAE as a wholly owned subsidiary of NAC Dubai, with the intent of expanding
NAC operations in the Middle East and possibly acquiring an A6 airline operating
certificate in the region.
National Air Cargo (Japan) KK ("NAC Japan"), a
Japanese corporation, was formed as a wholly owned subsidiary of NAC
Malaysia OHQ.
Finally, NAC Thailand was established as a wholly owned
subsidiary of NAC Holdings.
Both NAC Japan and NAC Thailand were
established to provide worldwide air cargo and charter services.
Most recently, on June 1, 2010, NAC Holdings registered a "Yuhan
Hoesa" company in Seoul, South Korea in order to continue the company's Asia
expansion. Similar to a limited liability company, the new entity, National Air
Cargo LLC (Korea), which is a subsidiary of NAC Malaysia OHQ, is part of an
overall strategic plan to enhance growth and develop new business opportunities
in developing marketplaces.
Citizenship
National Airlines is a citizen of the United States within the meaning of 14
CFR Section 204.2(c)(3).
As previously noted, Mr. Alf, the ultimate sole
shareholder of National Airlines, is a citizen of the United States and resides in
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California and Florida.
Mr. Preston Murray, the company's Chief Executive
Officer, and Mr. Thomas Quehl, the company's President, are both U.S. citizens.
As an ultimate wholly owned subsidiary of NAC Holdings, National Airlines
is overseen by the same Board of Directors that oversees NAC Holdings and its
other wholly owned subsidiaries. In addition to Mr. Alf and Mr. Murray, the Board
of Directors has five other members, all of whom are U.S. citizens: Mrs. Loretta
"Lori" Alf, the wife of Mr. Alf; Lieutenant General John Baker, USAF (retired);
Colonel Glen Joerger, USAF (retired); Mr. Jacob Mathew; and Lieutenant
General William Mortensen, USA (retired). Resumes for each board member are
included in Exhibit NA-4.
Finally, National Airlines is under the actual control of U.S. citizens. An
affidavit verifying these criteria and the company's U.S. citizenship is attached as
Exhibit NA-5.
4. Key Personnel: (§ 204.3(f))
The management of National Airlines has extensive experience in aviation
and operating large aircraft.
The current key personnel, who will continue to
serve in these capacities after the company's certification is amended to also
include passenger operations, are as follows:
CEO
Preston G. Murray*
President
Thomas J. Quehl
Chief Financial Officer
Joseph A. Stroud
Director of Operations
Steven F. Clements
Director of Safety
Carlos Veliz
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Director of Maintenance
Emmett M. Dotson
Director of Quality Control
Abraham V. Williams, Jr.
Manager Quality Assurance/
Chief Inspector
Richard A. Polas
Director of Training
Jahaziaha Webb
Chief Pilot
Jonathan W. Wiesinger
Maintenance Supervisor
Charles H. Davis, Jr.
(* Member of the Board of Directors)
The business address of each person named above is 835 Willow Run Airport,
Ypsilanti, Michigan, 48198.
All individuals named above are citizens of the
United States. Copies of their resumes are included with Exhibit NA-4. None of
these individuals own any shares of National Airlines.
Interests in relevant
corporations are described in Section 5 below. Positions and interests previously
held in any other carrier or person substantially engaged in the business of
aeronautics are reflected in the resumes. 5
Each of the technical personnel listed above-specifically, the Directors of
Operations and Maintenance and the Chief Pilot-meet all required qualifications
as mandated in 14 CFR Sections 119.65 and 119.67.
An organizational chart, showing the relationship of the various personnel
and operating departments within National Airlines, is attached as Exhibit NA-6.
It should be noted that in addition to serving as the CEO of National Airlines, Preston
Murray serves as the CEO and President of NAC Holdings and also for NAC AC
Ventures.
5
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5. Subsidiaries and Related Companies: (§ 204.3(h) and (i))
National Airlines' only subsidiary is NACG Leasing LLC ("NACG Leasing"),
a Michigan limited liability company, which is 100% owned by National Airlines.
NACG Leasing is an aircraft holding company which currently owns and leases a
DC-8-71F (N872SJ) to National Airlines. NACG Leasing is based at the same
address as National Airlines.
Other than NACG Leasing, National Airlines does not hold a substantial
interest in any other air carrier, foreign air carrier, or person substantially
engaged in the business of aeronautics. Related companies that are affiliated
with National Airlines through its holding companies are described above.
6. Financial Statements of National Airlines: (§ 204.3(k))
Exhibit NA-7 contains financial statements for National Airlines for 2007,
2008, 2009, and the first five months of 2010.
Pages 3 through 31 of Exhibit
NA-7 contain "Combined Financial Statements and Other Financial Information"
prepared by PriceWaterhouseCoopers ("PWC") for NAC Holdings and its
affiliates, including National Airlines' parent company, NAC Acquisitions, for the
years ended December 31, 2008 and 2007 ("the PWC 2007/2008 Combined
Statement,,).6
The PWC 2007/2008 Combined Statement was prepared
retroactively according to Generally Accepted Accounting Principles on an
accrual basis.
It does not separately address National Airlines, but instead
6 Since only the financial condition of National Airlines is of relevance in this application,
we have provided a redacted version of the PWC 2007/2008 Combined Statement which
deletes the pertinent financial information and notes for NAC Holdings and all of its
subsidiaries other than NAC Acquisitions, National Airlines' parent company. A nonredacted version of the PWC 2007/2008 Combined Statement will be submitted
separately to the Department under seal in conjunction with National Airlines' Motion for
Confidential Treatment regarding this exhibit.
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provides financial information for its parent, NAC Acquisitions, which is a holding
company for National Airlines.
All income and expenses for National Airlines are passed through to and
reported by NAC Acquisitions. Additionally, NAC Acquisitions has no income or
expenses from any other source, such that those figures stated for NAC
Acquisitions are those of National Airlines.
Specific results for NAC Acquisitions can be found on pages 28 through
31 of Exhibit NA-7, under the "Other Financial Information" section of the PWC
2007/2008 Combined Statement, in column 5 each of the "Combining Balance
Sheet
December 31,
2008;"
"Combining
Statement of Operations and
Stockholder's Equity for the Year Ended December 31, 2008;" Combining
Balance Sheet December 31, 2007;" and "Combining Statement of Operations
and Stockholder's Equity for the Year Ended December 31,2007."
Unaudited balance sheets and statements of income and retained
earnings for National Airlines for 2009, and for the first five months of 2010, are
also included with this application as pages 1 and 2 of Exhibit NA-7.7
We would note that the "Accounts payable-affiliate" entries appearing under "Current
liabilities" for NAC Acquisitions in Exhibit NA-7 pages 28 and 30 of the PWC 2007/2008
Combined Statement, have been moved to the "Long-term debt-Intercompany-NAC
Parent" category in the National Airlines 2009 and 2010 Unaudited Balance Sheets
appearing at page 2 of Exhibit NA-7. This change was made because the amounts
stated in these entries are not currently nor were ever liabilities of NAC Acquisitions or
National Airlines. Rather, the accounts reflected in the "Accounts payable-affiliate"
entries of the PWC 2007/2008 Combined Statement were simply accounts used by NAC
Holdings to move cash as needed to and from National Airlines, primarily in order to
purchase the DC-8 aircraft owned by NACG Leasing and to provide National Airlines
with working capital from time to time. There is no requirement that either NAC
Acquisitions or National Airlines payoff these amounts within the next twelve months, so
that these amounts can be properly reclassified as long-term debt in National Airlines'
2009 and 2010 Unaudited Balance Sheets. With this reclassification, National Airlines'
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The attached financial statements demonstrate that National Airlines has a
healthy balance sheet, and is financially well-positioned to undertake charter
passenger operations.
7. Actions and Outstanding Judgments: (§ 204.3(1) & (m))
There are no pending legal actions or outstanding judgments against
National Airlines, its key personnel or its shareholders, or against any relevant
corporations (including NAC Acquisitions, National Airlines' parent company;
NAC Holdings, the parent company of NACG Acquisitions; or Mr. Alf, the ultimate
sole shareholder of all three companies).
8. Current Aircraft Fleet: (§ 204.3(n))
National Airlines currently operates three DC-S aircraft in its interstate and
cargo charter transportation.
One of these is owned by National Airlines, as
follows:
DC-S-63F
NS65F,
and two are leased, as follows:
DC-S-71 F
NS72SJ
Leased from NACG Leasing, LLC
DC-S-73F
N155CA
Leased from Aersale, Inc.
A sworn affidavit of the FAA certification and compliance of these aircraft
is contained in Exhibit NA-S.
The Boeing 757 -200ER that will be used for Part 121 certificated
passenger and cargo operations will be leased from CIT Leasing, the owner of
the aircraft, for a period of eighteen months at a rate of $40,000 per month.
current assets clearly exceed its current liabilities for both 2009 and the first five months
of 2010.
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9. Investigations, Enforcement Actions and Complaints: (§ 204.3(0))
There are no DOT investigations, enforcement actions or complaints
currently pending against National Airlines or any relevant corporations or their
personnel. Additionally, no person employed by, or holding a substantial interest
in, National Airlines or any related company have any FAA or DOT proceedings
or investigations pending against them.
10. Charges of Fraud, Deception, etc.: (§ 204.3(p))
Neither National Airlines nor its predecessor Murray Air has ever been
subject to charges of unfair, deceptive or anticompetitive business practices or of
fraud, felony or antitrust violations. In 2005, prior to Murray Air's acquisition by
NAC Holdings, a NAC Inc. employee filed a qui tam action in U.S. District Court
alleging that NAC Inc. had violated the Federal Claims Act by submitting false
invoices to the Department of Defense ("DOD").
NAC Inc. was subsequently
investigated by DOD for allegedly fraudulent practices in transporting DOD
freight within the United States.
In October 2007, NAC Inc. and DOD entered into a negotiated settlement
that resolved all of these charges except for a single count of submitting a false
invoice.
NAC Inc. pleaded guilty to this charge and paid a fine to the United
States Government.
Subsequent to this plea, NAC Inc. entered into an Administrative
Agreement with the United States Air Force ("the Air Force") under which Mr. Alf
and five employees left the company and Mr. Alf's stock was placed in a voting
trust, with the company operating under the management of the voting trustee.
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In addition, Mr. Alf was debarred from government contracts for a period of three
years.
As a result of this agreement, DOT's Air Carrier Fitness Division in
February 2009 imposed certain conditions on National Airlines in order for the
carrier to retain its certificate fitness, including managing the company under a
voting trust agreement and an independent board; removing certain individuals
including Mr. Alf from any influence or control over the company; and regular
reporting by the company to the Department.
In May 2009, Mr. Alf filed a complaint in the U.S. District Court for the
District of Columbia contesting his debarment from government contracts and
challenging flaws in the Air Force's investigation. On October 29, 2009, the U.S.
District Court found the government's prior case to be "logically flawed" and
issued a preliminary injunction enjOining Mr. Alf's debarment from government
contracts.
The next day the Air Force permanently terminated Mr. Alf's
debarment, and in December 2009 entered into an Amended Administrative
Agreement with NAC Inc. and Mr. Alf that permitted him to dissolve the stock
voting trust and immediately resume control of NAC Inc.
Some elements of the
Amended Administrative Agreement remain in effect, as do certain reporting
requirements imposed by the Department of Transportation.
This oversight continues through the date of this application, and requires
National Airlines to submit periodic reports to the Department. National Airlines
has an exemplary compliance record with these requirements, and neither
National Airlines nor NAC Inc., NAC Holdings, nor any other NAC Holdings
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subsidiary, have been the subject of any further government enforcement
proceedings.
Indeed, both NAC Inc. and National Airlines continue to perform
numerous CRAF and other contracts for the U.S. military.
11. Aircraft Accidents or Incidents: (§ 204.3(q))
Neither National Airlines nor any relevant corporation nor any of their
personnel have been involved in any aircraft accidents or incidents during the
past year, nor are any prior accidents or incidents still under investigation.
12. Narrative History of Operations: (§ 204.3(r))
The history of National Airlines and its predecessor company Murray Air,
Inc. is included as Exhibit NA-3.
13. Description of Federal, State and Local Authority: (§204.3(s))
National Airlines operates under an Air Carrier Certificate issued by the
FAA under FAR Part 121 (Certificate No. U2RA944L), which currently authorizes
charter air carrier cargo operations in common carriage. As discussed in Section
19 below, National Airlines is currently working with the FAA Detroit Flight
Standards District Office ("Detroit FSDO") to obtain the necessary amended
certification and operations specifications for Part 121 passenger charter
operations.
14. Description of Proposed Operations: (§ 204.3(t))
As noted above, National Airlines wishes to conduct passenger charter
operations with its newly acquired Boeing 757 -200ER, and consequently requires
amended DOT certificate authority to conduct both passenger and cargo charter
operations. Under the passenger authority, National Airlines intends to market
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the aircraft for full charter flights to public charter operators and organizations for
single entity charters.
Potential clients include USAJet, InterFlight Global
Corporation, and several NCAA sports teams.
The proposed passenger operations also include flights on behalf of heavy
industrial corporations from the United States to Germany, and then on to points
in Europe and back to the United States.
approximately five days each week.
This route would be traveled
The company is also considering leisure
market charters from the United States to South America, also on a five-day per
week basis, for the purpose of transporting ocean cruise line passengers to and
from various points along the cruise line route.
Additionally, after a full year of large-aircraft passenger experience has
been completed, National will be in a position to operate passenger/combination
charters for the DOD. The company understands the Department's standard
requirement that a carrier demonstrate its fitness to operate additional aircraft,
and it will provide such information at a later time with respect to the combi
aircraft and any fleet expansion request.
15. Maintenance and Training:
Line maintenance on the Boeing 757 -200ER will be performed by National
Airlines.
Heavy maintenance work will be performed by PEMCO World Air
Services, and engine work by TES Aviation Group.
Contracted work is the responsibility of the Director of Maintenance, and
the Director of Quality Control is responsible for the quality and control of the
maintenance training program.
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16. Forecast Financial Results of Operations and Financial Fitness
Test: (§ 204.3(t))
Exhibit NA-9 contains National Airlines' projected financial statements for
the first full year of amended certificate operations. This information is provided
on an accrual basis. Exhibit NA-1 0 lays out a summary of National Airline's startup expenses for the proposed passenger operations.
How the company will
meet the three-month financial fitness test is examined in the "Financial Fitness
Analysis" included as Exhibit NA-11.
As previously noted, National Air Cargo Holdings in its letter included as
Exhibit NA-13 has pledged that National Air Cargo will provide any capital
required by National Airlines in meeting its start-up costs and expenses in
conducting the proposed passenger operations.
As shown in the Financial
Fitness Analysis included as Exhibit 11 and the third-party verification of funds
letter provided in Exhibit NA-12, National Air Cargo possesses more than
sufficient funds to meet these obligations.
These exhibits demonstrate that National Airlines is fit, willing and able to
provide the proposed passenger services without risk to the public.
17. Warsaw Waiver Agreement: (§ 204.3(u))
An executed counterpart of Agreement 18900 (OST Form 4523) was filed
by National Airlines in 2007 in Docket OST 95-236.
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18. Family Assistance Plan (49 U.S.C. § 41113) and Passenger
Manifest Plan (Part 243)
National Airlines is aware of its responsibilities under 49 U.S.C. Section
41113 to submit a plan to implement the Aviation Disaster Family Assistance Act
of 1996 (Pub. L. 101-264), as amended, and under Part 243 of the Department's
rules to submit a plan for collecting passenger manifest information from covered
passengers. It is in the process of preparing those plans and will file them as
required as soon as possible, and will incorporate procedures implementing
those plans into the company's manual system.
19. Amendment of FAA Part 121 Certificate
National Airlines has had extensive discussions and meetings with the
FAA Detroit FSDO regarding the addition of the Boeing 757-200ER to the
company's Part 121 certificate, and the amendment of its certificate and
operation specifications to include passenger operations.
National Airlines is
currently completing preparation of its required manuals for the aircraft and
passenger operations for review by the FAA.
20. Certification: (§ 204.3(v))
The required certification, signed by National Airline's President, Mr.
Thomas Quehl, is included as Exhibit NA-14.
21. Qualifications for Passenger Operations
The addition of interstate and foreign passenger authority to National
Airlines' certificate authority is a natural extension of its Part 135 air taxi
operations and the experience of its key personnel.
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As noted in the company
history set forth in Exhibit NA-3, National Airlines conducted Part 135 charter
flight operations for nearly 25 years before suspending those operations in 2009.
The company's fleet at various points has included MU-11 s, Learjets, Casa
212/200s, a Beechcraft King Air, a SAAB 340 and a BAE Jetstream 31 and
32EP.
At one point the company operated up to eight aircraft at one time,
although the fleet in 2009 consisted of three aircraft.
The company's primary passenger clients were Fortune 500 companies,
including auto manufacturers like DaimlerChrysler, needing employees flown
between company locations throughout the United States, Mexico and Canada.
National Airlines enjoyed considerable success in this area, shuttling over 10,000
passengers in 2005. Between 2002 and 2006, the company transported over
21,740 DaimlerChrysler passengers alone to a variety of U.S. destinations.
At the time National Airlines suspended its Part 135 operations in 2009, it
employed an In-Flight Manager and five flight attendants. All flight attendants
underwent rigorous initial and annual recurrent FAA-compliant training, where
they learned about company policies and procedures, security, the Federal
Aviation Regulations, emergency drills, hazardous materials and also passenger
service requirements.
In 2005, National Airlines was presented with the National Business
Aviation Association's "Commercial Business Flying Safety Award" for operating
business aircraft for over 21 years and 72,607 consecutive hours without an
accident.
The award specifically recognized the company's commitment to
operational safety. Active Aero, North America's leading air charter management
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company, awarded National Airlines a "Carrier Appreciation Award" for the
company's dedication to on-time performance, communication and outstanding
customer service. The whole organization's commitment to quality has earned
its cargo operation a 100 percent on-time and 100 percent reliability rating from
the Air Mobility Command for the past five years.
National Airlines thus has substantial experience conducting passenger
charter operations and is well-versed with FAA safety requirements for those
operations. The company has hired Ms. Kim Farrington to serve as the Director
of In-flight Services and to oversee the training and supervision of its flight
attendants for the passenger operations. The Director of Security will ensure that
all applicable aircraft, baggage and passenger security requirements are met.
The company is in the process of hiring a Director of Security with both
passenger and DOD experience.
Any charter contracts undertaken will be primarily through charter brokers,
and those contracts will be negotiated and handled by National Airlines' charter
sales staff. The sales staff will be under the supervision of the Director of the
Charter Management Group, Mr. Glen Gates, who will have responsibility for
ensuring that any charter requirements under 14 CFR Part 212 are satisfied.
Any consumer complaints emanating from National Airlines' passenger
operations will be addressed by the company's Manager of Customer Service,
Mr. Bernie Walsh, who has substantial management experience in customer
interaction. Scheduling of the passenger charters will be handled by Ms. Regina
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Eikland, National Airlines' Manager of Operations Control, who has significant
experience overseeing the scheduling of the company's numerous cargo flights.
22. Conclusion
As the above information and attached exhibit materials demonstrate,
National Airlines is legally and operationally well qualified to receive amended
certification by the Department to operate as a passenger charter carrier with
large aircraft, enabling it to broaden the scope of its services and clientele.
WHEREFORE, National Air Cargo Group, Inc. d/b/a National Airlines
requests that the Department issue it a Certificate of Public Convenience and
Necessity to operate interstate and foreign charter air transportation of persons,
property and mail, and any such other relief as the Department may deem
necessary.
Mark . Atwood
Elizabeth J. Wadsworth
Sher & Blackwell LLP
1850 M St., NW, Suite 900
Washington, D.C. 20036
(202) 463-2513
Attorneys for National Airlines
Dated: July 9, 2010
21
CERTIFICATE OF SERVICE
I, Elizabeth J. Wadsworth, hereby certify that on this 9th day of July, 2010, I served via
email the foregoing "Application of National Air Cargo Group, Inc. d/b/a National Airlines for an
Amended Certificate of Public Convenience and Necessity" on the following person:
Federal Aviation Administration
Detroit Flight Standards District Office
POI John Paul
8800 Beck Road-Eastside
Belleville, MI 48111
Email: RaymondJpaul@faa.gov
Elizabeth J. Wadsworth
NATIONAL AIRLINES
TABLE OF EXHIBITS
Exhibit
NA-1
Certificate of Good Standing
NA-2
National Air Cargo Holdings Organization Chart
NA-3
Narrative History of Operations
NA-4
Key Personnel Resumes
NA-5
Affidavit of United States Citizenship
NA-6
National Airlines Organization Chart
NA-7
Financial Statements
NA-8
Affidavit of FAA Compliance
NA-9
Consolidated Forecast Financial Statements and Narrative
(first year of amended certificate operations)
NA-10
Start-Up Costs
NA-11
Financial Fitness Analysis
NA-12
Third-Party Verification of Available Funds
NA-13
National Air Cargo Holdings Funds Letter
NA-14
President's Certification